Can a Power of Attorney Give Away a Life Estate?

By John Cromwell

A power of attorney is a written document wherein a principal grants an agent the power to take action on the principal’s behalf. Powers of attorney are often granted because the principal wants to take a specific action but cannot do it personally for some reason. What an agent can and cannot do is defined in the power of attorney document. A power of attorney can grant an agent the ability to give away a life estate specifically or the right to distribute a principal’s property subject to whatever terms the agent sees fit. However, the power of attorney may limit the circumstances in which an agent can use his power.

Life Estate Defined

A life estate is a right to use and control real estate for the duration of a holder’s, or life tenant’s, life. A life tenant can use or rent the property, but must maintain it. Once the life tenant dies, the property automatically goes to another person, known as a “remainderman.” The life tenant cannot sell the property without the consent of the remainderman. A principal can only authorize the agent to do things the principal would be able to do. So if the principal has a life estate that he has authorized an agent to dispose of, the agent can only sell the right to use the property for as long as the principal lives, not the property itself.

Durable Power of Attorney

A durable power of attorney grants the agent the ability to act for the principal even if the principal is incapacitated. A traditional power of attorney would not allow an agent to act unless the principal was in a position to monitor his actions. If the agent does not have a durable power of attorney and his principal is incapacitated, he cannot convey a life estate.

Ready to appoint a power of attorney? Get Started Now

Fiduciary Duty

All agents owe their principals a fiduciary duty. That means while using the authority granted to them by their principals, agents cannot try to enrich themselves or do anything that would hurt their principal’s interests. This means that just because an agent is authorized to transfer a life estate doesn't mean he can do so; if transfer of the life estate would not be in the principal's best interests or against the agent’s fiduciary duty, he cannot do it.

Recovering Damages for Transaction

If your agent wrongfully transferred a life estate, you should immediately revoke his power of attorney. You can sue the agent for damages you incurred because of the transaction in civil court. You may also be able to press criminal charges, such as fraud or theft, depending on the severity of the case.

Ready to appoint a power of attorney? Get Started Now
Can You Sell a Home With a Power of Attorney?
 

References

Related articles

Laws for Power of Attorney in New Hampshire

New Hampshire financial power of attorney laws set forth the rules and limitations under which a person, known as the principal, may grant authority to another person, known as the agent, to act on their behalf. The agent acting for the principal can do whatever the principal has allowed her to do, as outlined in the power of attorney document. In New Hampshire, an agent may have broad authority that includes signing the principal's real estate deal papers and completing the principal's banking.

About Rights of Power of Attorney After Death

A power of attorney is a powerful legal document that allows the person who executes it, known as the principal, to appoint another person, known as an agent or attorney-in-fact, to perform legal acts on his behalf. Normally, a power of attorney automatically terminates by operation of law as soon as the principal dies. Limited exceptions exist, however.

If I Have Power of Attorney, Can I Deed a House Over to My Name?

Power corrupts and absolute power can corrupt absolutely. A general power of attorney gives the agent the ability to do virtually anything with the finances of the principal. Although self-dealing is strictly forbidden in this fiduciary relationship, more than a few agents have used their authority to transfer assets to themselves. The law imposes civil and criminal penalties for such conduct.

Related articles

Does a Power of Attorney Have the Right to Change a Living Trust?

Estate planning often involves creating a living trust and granting someone a power of attorney. A living trust is an ...

Can a POA Change a Will?

A power of attorney allows a person, referred to as an agent or attorney at law, to act on behalf of another person, ...

What Are the Duties of Power of Attorney?

A power of attorney is a legal document that allows one person to act for another person, but the authority comes with ...

Can a Person With Power of Attorney for Another Profit From the Sale of a House?

A power of attorney is created when a person -- the principal -- creates a document giving authority to a third party – ...

Browse by category
Ready to Begin? GET STARTED